Comparing Medicare Supplement Premiums Across the Country
When you are choosing a plan that helps cover your health insurance costs, the last thing you want to do is pay more for it than you have to. Medigap (Medicare Supplement) plan premiums can be drastically different based on where you live or which insurance company you buy from. It’s important to do your research to make sure that you are getting a good deal on the plan you choose.
Today, we’re going to look at how much Supplement plans cost and compare Medigap premiums across the country to give you insight into what other Americans are paying for their plans. We’ll also provide you with a list of ways you may be able to lower your premium.
What is Medicare Supplement (Medigap)?
Medicare Supplement plans, also known as Medigap plans, are policies sold by private insurers to help pay for health care costs not covered in Original Medicare Parts A and B. Medigap policies may also cover services that Original Medicare doesn’t cover like health care provided during foreign travel.
What are my options for Medigap coverage?
There are ten Medigap benefit coverage options that are standardized on a state-by-state basis, with each plan option designated by a letter. (Massachusetts, Minnesota, and Wisconsin are the exception and offer plans that differ from the standard designs. If you reside in one of these states, you should contract our licensed insurance agents for more information.)
Table 1.2 in the infographic shows the different plan options and which additional benefits they cover. For example, Plan A doesn’t cover the coinsurance for a skilled nursing facility, but Plan C does. Medigap Plan A is the least comprehensive and Plan F is the most comprehensive plan available.
Table 1.1 shows the national average premium for each plan type in 2010. Plan A has the lowest premium, at $140, probably because it covers the least amount of benefits. Surprisingly, Plan D national premium averages were higher than Plan F, even though Plan D offers fewer benefits.1 However, Plan F tends to be more expensive option when you compare plans locally.2 It’s also the most popular plan across the country by far.
How much do Supplement plans cost?
Regardless of where a plan is offered, same-letter Medigap plans include identical benefits. However, because insurance companies can set their own premiums for standardized plans, there can be large premium cost differences for the exact same Medigap coverage.
For instance, Leavitt Partners’ analysis of data from CMS shows that Medigap Plan F, which is the most popular Medigap option, has monthly premium costs that range from $150 to $1,000, depending on the insurance company and the state in which the plan is offered. The average Medigap plan in the U.S. costs $183 per month.3
It may be helpful to ask an insurance company how it prices its Medigap policies, and consider if your monthly premium will increase as you age. Medigap plan providers can price their plans in three different ways, which will impact how the cost of your plan will change or stay the same over time. These pricing methods include:
- Community-rated: The same monthly premium is charged to everyone, regardless of age. Premiums may fluctuate due to inflation, but not age.
- Issue age-rated: Premiums are based on the age of enrollment and do not increase as you get older. Younger policy holders have lower premiums.
- Attained age-rated: Premiums are based on your current age, and get more expensive as you get older.
How do Medigap premiums differ across the country?
The map in the Infographic shows the drastic cost differences in Medigap Plan F premiums across the country. On average, Indiana has the most expensive Plan F premium in the nation, with the highest premium costing over $1,000+ per month. Plan F premiums can also get pretty high in California and New York, places where the cost of living is higher than the U.S. average. Plan F premiums in these states can reach up to anywhere between $451 to $600.
Plan F premiums may be higher in Florida because Florida state law requires that all providers price their plans on Issue age-rated price structure. Since insurers can’t raise plan premiums as their members get older, they generally tend to have higher premiums across all plans.
Mississippi and Alabama have some of the lowest Plan F premiums in the country, with their highest premiums coming in at $150 to $200 per month. The cost of living in these states and the national average cost for doctors visits is also much lower than rest of the country, so it makes sense that plan providers would keep their premiums low there.4
Beyond price, what should I look for in a plan?
When choosing the Medigap plan that is right you, be sure to compare plans based on added values outside of insurance benefits, such as the company’s customer service and quality standards. Medigap insurance companies may offer additional value-added services such as vision discounts, nurse health advice lines, and fitness classes. These are important items to evaluate in deciding if the extra premium cost will benefit you.
How can I switch to a plan with a lower premium?
There are typically two ways that you can find a Medigap plan with a lower premium. First, you can search for a plan with the same benefits as your current plan at a lower premium. Your second option is to join a plan with fewer benefits if you don’t use all of the benefits in your current plan. Fewer benefits typically means a lower premium.
When can I switch or join plans?
If you’re looking to switch to a Supplement plan with a lower premium or one that better suits your healthcare needs, you may be charged more for a plan or turned down by insurers based on your past or present health. However, you may have a guaranteed-issue right to buy a Medicare Supplement plan regardless of pre-existing health conditions.
Find out if you have a guaranteed issue right to join a new Medigap plan by speaking with one of our licensed insurance agents. We are available at 855-802-1206, from 6am to 7pm MT, Monday to Friday and 7am to 5pm MT on Saturday. We are closed on Sunday.
The easiest time to join a Medigap plan for the first time is during the guaranteed issue, six-month open-enrollment period. This period begins the month of your 65th birthday and when you buy Part B coverage. Regardless of pre-existing health conditions, you can buy any Medigap plan during this timeframe.
If you’re looking to learn more about what type of plan is right for you, feel free to contact our licensed insurance agents at 855-802-1206. We are available to help you find a plan that meets your needs and is in your budget. You can call us from 6am to 7pm MT, Monday to Friday and 7am to 5pm MT on Saturday. We are closed on Sunday.
1 Medigap: Spotlight on Enrollment, Premiums, and Recent Trends. Kaiser Family Foundation.
2 Medigap Plan F the most costly, yet popular. Bankrate.
3 Paying More for Less: Medigap Cost Sharing. Medicare Rights Center.
4 Mississippi, Alabama on MSNBC’s list of “cheapest” states in which to live. Alabama Live LLC.